Machinery/Industrial Goods

Moody's ups Flowserve to investment grade

MelodieWarner

Moody's Investors Service returned Flowserve Corp.'s
FLS, +1.57%
rating to investment grade, saying it expects the valve-and-pump maker to maintain good liquidity while adopting a new capital structure.

Earlier this month, Moody's placed Flowserve on review for a possible upgrade, after the company expanded its stock-repurchase program to $1 billion and implemented a new capital-structure strategy that will increase Flowserve's leverage.

The ratings company raised Flowserve's senior-secured bank-facility rating one notch to Baa3 from Ba1, putting it one step above junk level. The outlook is stable.

Flowserve has been seeking growth in emerging markets and has been expanding its customized-product offerings in an effort to drive growth. Flowserve serves a wide range of industries, including the oil-and-gas sector and the chemical, power-generation and water industries.

In April, Flowserve said its first-quarter earnings fell 4% amid weaker margins, though the valve-and-pump maker reported broad sales growth and said it recorded the strongest bookings since the third quarter of 2008.

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